XLE•XLE•SLB, Halliburton and Baker Hughes reported sequential revenue growth in parts of their Middle East businesses in the third quarter, but costs, disruptions and uneven activity cloud the outlook. SLB’s Middle East revenue rose 13% sequentially, Halliburton’s Middle East and Asia revenue rose 8%, and Baker Hughes expects Middle East activity to fall sequentially in the fourth quarter.
SLB, Halliburton and Baker Hughes reported sequential revenue growth in parts of their Middle East businesses in the third quarter as activity recovered from conflict-related interruptions. However, year-on-year results and company forecasts point to uneven activity and uncertainty over when a sustained recovery will begin.
SLB’s Middle East revenue rose 13% sequentially, although revenue from its division that includes Asia fell 7% year on year, primarily reflecting a 12% decline in the Middle East. Halliburton’s Middle East and Asia revenue rose 8% sequentially, driven by higher activity in Saudi Arabia and Kuwait. Baker Hughes expects Middle East activity to decline sequentially in the fourth quarter as logistics costs and supply-chain challenges weigh on operations; its Middle East and Asia revenue fell to $1.26 billion from $1.45 billion a year earlier.
TPH Research expects a gradual regional recovery, predicted to begin in the second half of 2027, to help drive SLB’s annual revenue growth of about 9%, excluding the impact of its Kelvion business. Company executives cited potential demand from production restoration and energy-security efforts, while a Zacks Investment Research strategist said further escalation in the Middle East or disruption around the Strait of Hormuz could delay projects.
